1324479--2/27/2008--AMERICAN_COMMERCIAL_LINES

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{cost, operation, labor}

{debt, indebtedness, cash}

{operation, natural, condition}

{condition, economic, financial}

{cost, regulation, environmental}

{regulation, change, law}

{capital, credit, financial}

{customer, product, revenue}

{property, intellectual, protect}

{competitive, industry, competition}

{gas, price, oil}

{operation, international, foreign}

{personnel, key, retain}

An oversupply of barging capacity may lead to reductions in freight rates. Yields from North American and worldwide grain harvests could materially affect demand for our barging services. Diminishing demand for new barge construction may lead to a reduction in sales prices for new barges. Higher fuel prices, if not recouped from our customers, could dramatically increase operating expenses and adversely affect profitability. Our operating margins are impacted by certain low margin legacy contracts and by spot rate market volatility for grain volume and pricing. We are subject to adverse weather and river conditions. Seasonal fluctuations in industry demand could adversely affect our operating results, cash flow and working capital requirements. The aging infrastructure on the Inland Waterways may lead to increased costs and disruptions in our operations. The inland barge transportation industry is highly competitive; increased competition could adversely affect us. Global trade agreements, tariffs and subsidies could decrease the demand for imported and exported goods, adversely affecting the flow of import and export tonnage through the Port of New Orleans and the demand for barging services. Our failure to comply with government regulations affecting the barging industry, or changes in these regulations, may cause us to incur significant expenses or affect our ability to operate. The Jones Act restricts foreign ownership of our stock, and the repeal, suspension or substantial amendment of the Jones Act could increase competition on the Inland Waterways and have a material adverse effect on our business. RISKS RELATED TO OUR BUSINESS Our aging fleet of dry cargo barges may lead to increased costs and disruptions in our operations. We may not be successful in our plans to upgrade our production lines in our shipyard and realize increased levels of capacity and efficiency. Our plans for our transportation business capital investment and organic growth are predicated on efficiency improvements which we expect to achieve through a variety of initiatives, including reduction in stationary days, better power utilization and improved fleeting, among others. We may not ultimately be able to drive efficiency to the level to achieve our current forecast of tonnage without investing additional capital or incurring additional costs. Our cash flows and borrowing facilities may not be adequate for our additional capital needs and, if we incur additional borrowings, our future cash flow and capital resources may not be sufficient for payments of interest and principal of our substantial indebtedness. Our substantial borrowings are currently all tied to floating interest rates which may expose us to higher interest payments should LIBOR or the prime rate increase substantially. We face the risk of breaching financial covenants in our credit agreement. As part of our growth strategy, we may continue to make selective acquisitions, the integration and consolidation of which may disrupt operations and could negatively impact our business, including our margins. The loss of one or more key customers, or material nonpayment or nonperformance by one or more of our key customers, would have a material adverse effect on our revenue and profitability. A major accident or casualty loss at any of our facilities could significantly reduce production Our transportation division employees are covered by federal maritime laws that may subject us to job-related claims in addition to those provided by state laws. We have experienced work stoppages by union employees in the past, and future work stoppages may disrupt our services and adversely affect our operations. The loss of key personnel, including highly skilled and licensed vessel personnel, could adversely affect our business. Failure to comply with environmental, health and safety regulations could result in substantial penalties and changes to our operations.

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1324479--2/27/2008--AMERICAN_COMMERCIAL_LINES_INC.